Panache Ventures announces $100M Fund II to double down on early-stage founders

Panache Ventures, one of Canada’s most active pre-seed and seed stage investors, revealed that it’s raised a new fund with commitments of $100 million.

Its major limited partners include Alberta Enterprise Corporation, Ontario Capital Growth Corporation, Investissement Québec, BMO Financial Group, and TELUS Ventures.

Additional entrepreneurs, executives, and family offices from across the country also contributed to the fund.

In a conversation with Vancouver Tech Journal, local partner Chris Neumann called the announcement a vote of confidence in the Canadian early-stage ecosystem. “At a time where there's some pullback in the macro markets, we're coming out and saying, ‘look, we're doubling down on pre-seed across Canada.’ We think the sky's the limit. We think there's no better time to be investing, and we're incredibly bullish on the Canadian tech ecosystem and the early-stage startup market.”

Panache invests in pre-seed and seed stage companies across verticals like enterprise software, AI and machine learning, fintech, blockchain and web3, health tech, and climate tech. Panache launched what it called Fund I in 2018 with over $58 million in committed capital. It invested that initial pool of money in 100 companies and has had three exits including fintech company Flinks, as well as proptech company Lane.

Other notable startups in the portfolio include Tailscale and B.C.-based Spocket, Dooly, and Certn. The latter two have gone on to raise significant funding rounds. Certn CEO Andrew Mcleod said Panache was key to the startup’s success in closing its Series A and USD $50 million Series B round. “Beyond the investment, their mentorship has been instrumental in guiding Certn to where it is today,” Mcleod said.

The new fund has been in the works since at least last September when Panache acquired San Francisco-based Commonwealth Ventures and hired Neumann to be its Vancouver-based partner. At the time, the firm was looking to raise $75 million, but eventually brought in $25 million more. To date, Fund II has made investments into 12 companies, nine of which have been shared publicly.

Three investments have been made into Vancouver businesses, of which two have been announced: Big Whale Labs and Impro.

When Neumann joined Panache last year, he says it made the firm the only pre-seed fund in Canada with a national footprint. “Historically, early-stage funds have been regional in nature. We had Western Canadian funds, Toronto funds, Waterloo funds, Quebec funds, Atlantic Canadian funds,” he outlines.

“For us, we believe there's opportunity across the country. We've invested in companies in Victoria, like Certn, all the way to St. John's in Newfoundland. And for us, having a presence across the country – having partners in Canada's four largest cities – provides us with the ability to be on the ground and interact with the ecosystem at its earliest stages. We believe that there is potential for great companies to be founded anywhere in Canada, so being physically on the ground is a huge part of our work.”

Although funding levels have dropped dramatically in B.C. so far this year, Neumann is unsurprisingly bullish on the province. “There's a lot more we're seeing here, and we think there's just an incredible opportunity in B.C. specifically, and we're going to be putting a lot of effort into that.”